IENG 217 Cost Estimating for Engineers Product Estimating

Product Methods Estimating Design Costs Productive Hour Cost Model Estimate Engineering Costs Estimate Unit Costs (Bill of Material) Productive Hour Cost Model

Unit

Unit Metal machining cost may be related to length of the bar stock that is turned on a lathe. Actual tickets yield

Unit Metal machining cost may be related to length of the bar stock that is turned on a lathe. Actual tickets yield Ca = 110/9 = $12.22 / in.

Unit Cost Fails to apply principle of economy of scale Accounts for slope only Regression: Ca = -23.3 + 20(length)

Product Methods Estimating Design Costs Productive Hour Cost Model Estimate Engineering Costs Estimate Unit Costs (Bill of Material) Productive Hour Cost Model

Engineering Costs

Engineering Costs

Product Methods Estimating Design Costs Productive Hour Cost Model Estimate Engineering Costs Estimate Unit Costs (Bill of Material) Productive Hour Cost Model

Estimate Unit Costs Engineering bill of materials Due date for completion Quantity, rate of production, etc. Special test, inspection Packaging & shipping information Marketing information

Bill of Material

Bill of Material

Product Methods Estimating Design Costs Productive Hour Cost Model Estimate Engineering Costs Estimate Unit Costs (Bill of Material) Productive Hour Cost Model

Productive hour cost model

Productive hour cost model

Example

Example From below

H SU N x hrs l c = + ( / ) . 60 75 87 31 561 46 51 Example

Example PHC lot hours x prod hr t rate = cos . ( ) $1 , 46 51 32 19 497 27 Example

Note that this is only for final assembly; other labor material cost comes from BOM. Example

Example Add material cost from BOM (includes prior labor costs).

Example Total costs for 87 units of the XJ-27 part.

Example Cost per part for the XJ-27 =65,650.15 / 87 = 754.60.